Creador exits Somany Ceramics with high return

Private equity firm Creador, which focuses on South and Southeast Asia, has fully exited its more than three-year-old investment in Somany Ceramics Ltd, it said in a statement.

The PE firm clocked an investment multiple of 5.3 times and an internal rate of return (IRR) of 77% in rupee terms on the investment. In dollar terms, the firm recorded a multiple of five times and an IRR of 74%, it said on Thursday.

The firm, through its second fund Creador II, had picked up a 13.6% stake in Somany in early 2014 for roughly Rs 62 crore. It sold its stake for a total of Rs 326 crore.

Creador had sold part of its stake in Somany in October 2015, earning 2.9 times return on its investment. It sold its remaining stake of 10.3% last month to local institutional investors.

VCCircle recently reported that the firm sold bulk of its stake in Somany and had recorded above-par returns from the exit.

With this exit, Creador has realised 28% of committed capital for its second fund. The firm had completed fundraising for its first fund in 2013 after mopping up $130 million. The following year, it mobilised $330 million in its second fund. The PE firm is now investing out of its third fund, which scooped up $415 million last year.

On Wednesday, VCCircle reported that the firm had returned the principal corpus of its maiden fund to its investors and that it was working on exit avenues for other investments.

Mumbai-based Somany makes ceramic, polished vitrified tiles and glazed vitrified tiles. It retails through 10,000 touch points, including 200 exclusive showrooms, and has forayed into sanitary ware and bath fitting products over the past few years.

The statement said that Somany’s revenue grew from Rs 1,260 crore in 2014 to Rs 1,720 crore in 2017 during the investment period of Creador.

From its second fund, Creador exited GHL System Berhad, a leading payment service provider in Southeast Asia in March 2017.

Previously, Creador had struck three exit deals from its maiden fund—Malaysian restaurant chain OldTown White Coffee in April 2013; Repco Home Finance Ltd in October 2014; and Cholamandalam Investment & Finance Company Ltd in June 2016.